Delaware Holds NJ Cards

By Bill CahirNewhouse News Servicegcnews@sjnewsco.comWASHINGTON, D.C. -- It was not a decision that New Jersey public officials and developers wanted to read.

Ralph I. Lancaster Jr., a special master appointed by the U.S. Supreme Court, on April 12 ruled that New Jersey did not have "exclusive" jurisdiction over wharves and docks built eastward from the South Jersey shore, into the Delaware River.

Instead, Lancaster determined that Delaware, the state, had partial control of the underwater lands off of New Jersey's southwestern coast. State officials in New Jersey could not single-handedly approve a plan put forward by BP America to build a new liquefied natural gas facility on 175 acres of Logan Township, Gloucester County, according to Lancaster's findings.

The proposed Crown Landing site would store up to 450,000 cubic meters of liquefied natural gas.

It would receive liquefied natural gas from ships, convert it to gas and pump 1.2 billion cubic feet per day through a pipeline from Logan Township to Brookhaven, in Delaware County, Pa.

Texas Eastern Transmission Company would build the new, 11-mile pipeline. The facility, however, would need a 2,000-foot pier that would jut from the New Jersey shoreline and into eastern waters of the Delaware River.

Delaware had jurisdiction, or at least shared jurisdiction, with New Jersey itself over improvements extending from the South Jersey shore, Lancaster ruled.

That was bad news for people who wanted to see the Crown Landing proposal go forward.

It had the support of the Federal Energy Regulatory Commission, the federal regulatory body with oversight over LNG facilities. FERC accepted industry representations that the new LNG terminal would supply natural gas needed by about 5 million homes per day, reducing price volatility.

But even with federal, state and local support, the project cannot go forward, at least not for now. Delaware exercised its veto. The Crown Landing proposal violates Delaware's coastal management law by putting a manufacturing facility in a sensitive zone, the Delaware Department of Natural Resources and Environmental Control rules on Feb. 3, 2005.

The U.S. Supreme Court will hear oral arguments on Nov. 27 to determine whether or not to accept Lancaster's findings in the New Jersey and Delaware border dispute. The high court appointed Lancaster, an attorney from Portland, Maine, to handle the court's investigation of the Delaware-New Jersey border dispute.

"What is at stake in this case is New Jersey's right to control development along its shoreline in the 12-mile circle, without interference from Delaware," Leland Moore, spokesman for New Jersey Attorney General Anne Milgram, said in an e-mail note.

Attorneys, when they refer to the 12-mile circle, are making a historical reference dating to 1682. It was then that the Duke of York awarded land in what is now Pennsylvania to William Penn.

As part of that deed, Delaware received the land and water rights within 12 miles of New Castle, Del. Pennsylvania's southeastern border starts north of the 12-mile arc. A portion of the Delaware River falls within that arc as well.

States normally establish their borders halfway across any river. But New Jersey and Delaware have locked horns over use of the Delaware River, especially fishing rights, within the 12-mile circle.

Delaware claims all of the underwater land up to the low-tide mark on the South Jersey shore. And that has led to a number of uncomfortable disputes.

In 1871, Delaware passed a law requiring New Jersey residents to pay $20 for a fishing permit while asking Delaware residents to pay only $5, according to Lancaster.

A year later, Delaware authorities actually arrested several New Jersey citizens at gunpoint because they were found to be fishing in the Delaware River without Delaware licenses, Lancaster wrote.

After these and other aggravations, the two states in 1905 struck a compact meant to resolve their border disputes over water rights and underwater lands within the 12-mile circle.

The two-state compact said that New Jersey and Delaware both may "continue to exercise riparian jurisdiction of every kind and nature" on their own side of the river.

But what did that mean? What was one state's side of the river?

The U.S. Supreme Court in 1934 ruled that Delaware owned the Delaware River, including underwater lands, up to the low-tide mark on the New Jersey side of the river.

In other words, Delaware's view prevailed.

Lancaster wrote that the court's 1934 ruling meant that "each of six municipalities in New Jersey has one boundary all or partially at the low water mark of the river within the 12-mile circle, thus bordering directly on Delaware's territory: Logan Township in Gloucester County; and Oldmans Township, Penns Grove Borough, Carneys Point Township, Pennsville Township and Elsinboro Township, all within Salem County."

New Jersey State Assemblyman John J. Burzichelli on Friday said in an interview that he hoped to see the U.S. Supreme Court ultimately find that the 1905 compact did not award such sweeping influence of and control over the South Jersey shoreline to Delaware state authorities.

If Delaware's restrictive coastal management law applies along the southwestern New Jersey shoreline, that finding will have a significant economic impact upon Gloucester and Salem counties, according to Burzichelli.

Delaware not only would gain the legal power to nix the Crown Landing liquefied natural gas proposal, Burzichelli says. It also would gain the power to veto any number of shoreline improvements envisioned in southern New Jersey, such condominium and marina developments planned in Pennsville and deepwater port improvements planned for Carneys Point, Burzichelli said.

"Crown Landing generated the controversy, which is the term the court uses," Burzichelli said. "But Crown Landing is just one project ...

"If we don't get a clarification on this compact, we could have to go to Dover, Delaware, for approval, as opposed to working through New Jersey's apparatus, which means Delaware will effectively shut down 29 miles of New Jersey's coastline for economic development for anything that doesn't work for them," he said.

"They're not the enemy here. We just have a real difference of opinion," Burzichelli stated.

David C. Frederick, an attorney representing Delaware at a Feb. 22 hearing before Lancaster, argued that Delaware's current position mimics ordinary zoning law. Delaware simply was trying to apply its coastal management law to underwater lands that it owned and controlled, he said.

"(A)ll Delaware is asserting here is the right to exercise its full sovereign powers of police power within its boundaries, which would be perfectly natural in the land context for a building," Frederick testified.

Tom Mueller, a spokesman with Crown Landing LLC, said his company was keeping tabs on the case, even if BP and Crown Landing were not officially listed as litigants in New Jersey v. Delaware.

"What are the other options for doing this project?" Mueller said. "We are actively looking at and exploring a variety of options should the Supreme Court rule against New Jersey."